Copenhagen/Reykjavik  - Danish Prime Minister Anders Fogh Rasmussen on Tuesday indicated that Nordic neighbours of Iceland were preparing to help the North Atlantic state financially.

Iceland has been hammered by the financial turmoil and its main commercial banks have been nationalized by the state.

Speaking to foreign correspondents in Copenhagen, Rasmussen declined to spell out details but said the neighbouring Nordic states were prepared to offer "more than just moral" help.

Denmark, Finland, Norway and Sweden along with Iceland belong to the Nordic Council organization.

In Reykjavik, trading on the Icelandic stock exchange resumed Tuesday with the exception of bank shares.

The operator NASDAQ OMX Iceland halted trading on Thursday owing to what the operator called "unusual market conditions."

The Icelandic parliament approved special legislation a week ago giving special powers to the Icelandic Financial Supervisory Authority.

Over the weekend, representatives of Iceland, Britain and the Netherlands discussed the repayment of foreign deposits frozen in the three Icelandic banks Landsbanki, Glitnir and Kaupthing.

The Icelandic commercial banks have rapidly expanded their operations in recent years, and run up liabilities at least five times that of Iceland's GNP.

Iceland's Finance Minister Arni M Mathiesen was meanwhile reported to be in Washington to discuss a possible emergency loan from the International Monetary Fund (IMF). (dpa)